Correlation Between Korea Real and Ubiquoss Holdings
Can any of the company-specific risk be diversified away by investing in both Korea Real and Ubiquoss Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Korea Real and Ubiquoss Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Ubiquoss Holdings, you can compare the effects of market volatilities on Korea Real and Ubiquoss Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Korea Real with a short position of Ubiquoss Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Ubiquoss Holdings.
Diversification Opportunities for Korea Real and Ubiquoss Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Ubiquoss is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Ubiquoss Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubiquoss Holdings and Korea Real is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Korea Real Estate are associated (or correlated) with Ubiquoss Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubiquoss Holdings has no effect on the direction of Korea Real i.e., Korea Real and Ubiquoss Holdings go up and down completely randomly.
Pair Corralation between Korea Real and Ubiquoss Holdings
Assuming the 90 days trading horizon Korea Real Estate is expected to generate 0.97 times more return on investment than Ubiquoss Holdings. However, Korea Real Estate is 1.03 times less risky than Ubiquoss Holdings. It trades about -0.03 of its potential returns per unit of risk. Ubiquoss Holdings is currently generating about -0.11 per unit of risk. If you would invest 112,352 in Korea Real Estate on September 14, 2024 and sell it today you would lose (9,752) from holding Korea Real Estate or give up 8.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Korea Real Estate vs. Ubiquoss Holdings
Performance |
| Timeline |
| Korea Real Estate |
| Ubiquoss Holdings |
Korea Real and Ubiquoss Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Ubiquoss Holdings
The main advantage of trading using opposite Korea Real and Ubiquoss Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Ubiquoss Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ubiquoss Holdings will offset losses from the drop in Ubiquoss Holdings' long position.| Korea Real vs. Samsung Electronics Co | Korea Real vs. Samsung Electronics Co | Korea Real vs. LG Energy Solution | Korea Real vs. SK Hynix |
| Ubiquoss Holdings vs. Sempio Foods Co | Ubiquoss Holdings vs. Hankuk Steel Wire | Ubiquoss Holdings vs. Hironic Co | Ubiquoss Holdings vs. CJ Seafood Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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